Exploring the financial consequences of the servitization of manufacturing

Commentators suggest that to survive in developed economies manufacturing firms have to move up the value chain, innovating and creating ever more sophisticated products and services, so they do not have to compete on the basis of cost. While this strategy is proving increasingly popular with policy makers and academics there is limited empirical evidence to explore the extent to which it is being adopted in practice. And if so, what the impact of this servitization of manufacturing might be. This paper seeks to fill a gap in the literature by presenting empirical evidence on the range and extent of servitization. Data are drawn from the OSIRIS database on 10,028 firms incorporated in 25 different countries. The paper presents an analysis of these data which suggests that: [i] manufacturing firms in developed economies are adopting a range of servitization strategies-12 separate approaches to servitization are identified; [ii] these 12 categories can be used to extend the traditional three options for servitization-product oriented Product-Service Systems, use oriented Product-Service Systems and result oriented Product-Service Systems, by adding two new categories "integration oriented Product-Service Systems" and "service oriented Product-Service Systems"; [iii] while the manufacturing firms that have servitized are larger than traditional manufacturing firms in terms of sales revenues, at the aggregate level they also generate lower profits as a % of sales; [iv] these findings are moderated by firm size (measured in terms of numbers of employees). In smaller firms servitization appears to pay off while in larger firms it proves more problematic; and [v] there are some hidden risks associated with servitization-the sample contains a greater proportion of bankrupt servitized firms than would be expected. © Springer Science + Business Media, LLC 2009.

Technology confidence in early stage development of medical devices

Innovation is a critical factor in ensuring commercial success within the area of medical technology. Biotechnology and Healthcare developments require huge financial and resource investment, in-depth research and clinical trials. Consequently, these developments involve a complex multidisciplinary structure, which is inherently full of risks and uncertainty. In this context, early technology assessment and 'proof of concept' is often sporadic and unstructured. Existing methodologies for managing the feasibility stage of medical device development are predominantly suited to the later phases of development and favour detail in optimisation, validation and regulatory approval. During these early phases, feasibility studies are normally conducted to establish whether technology is potentially viable. However, it is not clear how this technology viability is currently measured. This paper aims to redress this gap through the development of a technology confidence scale, as appropriate explicitly to the feasibility phase of medical device design. These guidelines were developed from analysis of three recent innovation studies within the medical device industry.

Dynamic Covariance Models for Multivariate Financial Time Series

The accurate prediction of time-changing covariances is an important problem in the modeling of multivariate financial data. However, some of the most popular models suffer from a) overfitting problems and multiple local optima, b) failure to capture shifts in market conditions and c) large computational costs. To address these problems we introduce a novel dynamic model for time-changing covariances. Over-fitting and local optima are avoided by following a Bayesian approach instead of computing point estimates. Changes in market conditions are captured by assuming a diffusion process in parameter values, and finally computationally efficient and scalable inference is performed using particle filters. Experiments with financial data show excellent performance of the proposed method with respect to current standard models.

Viability and performance of demountable composite connectors

Material production, and associated carbon emissions, could be reduced by reusing products instead of landfilling or recycling them. Steel beams are well suited to reuse, but are difficult to reuse when connected compositely to concrete slabs using welded studs. A demountable connection would allow composite performance but also permit reuse of both components at end-of-life. Three composite beams, of 2 m, 10 m and 5 m length, are constructed using M20 bolts as demountable shear connectors. The beams are tested in three-, six- and four-point bending, respectively. The former two are loaded to service, unloaded, demounted and reassembled; all three are tested to failure. The results show that all three have higher strengths than predicted using Eurocode 4. The longer specimens have performance similar to previously published comparable welded-connector composite beam results. This suggests that demountable composite beams can be safely used and practically reused, thus reducing carbon emissions. © 2013 Elsevier B.V. All rights reserved.